Forbes CommunityVoice Connecting expert communities to the Forbes audience.What is This?

2,215 viewsOct 10, 2018, 08:00am

Five Important Practices For

Construction Entrepreneurs

YEC
CommunityVoice

Entrepreneurs

POST WRITTEN BY

Fares Elsabbagh

Fares Elsabbagh is the Chief Relationship Builder at Ottawa General Contractors.

•

Getty

If you work in the construction field, you probably got into the business because of
your knowledge and experience in a certain trade. The work usually requires years of
training and ample experience working in the field. However, I've worked in
construction for the past decade without ever having to pick up a hammer or work on
a single construction site. I'm not a tradesman, but I've still managed to build many
multimillion-dollar construction and renovation companies.
You may be asking, “How does someone build a successful company without any
experience in that field?” It's simple: I have the mindset of an entrepreneur. It's
possible, and actually can be quite easy, to successfully scale your business to a
multimillion dollar company if you have the right characteristics and thought process.
It's always a work in progress, but here are five practices you should implement if you
want to build a financially successful construction company.

1. Take action.

Many people become stuck after coming up with a great idea and are too afraid to
take the leap toward executing it. A successful outcome is born from a great idea, but
99% of success comes from how you execute it. Don’t get tied up with perfecting
your idea on paper -- just go for it. There's nothing worse than an entrepreneur who
takes months polishing their business plan only to waste valuable time. Spend your
time wisely, and adjust your plan as challenges arise. The most important step is
taking that first leap into action.

This is particularly important for entrepreneurs in the construction industry because

taking action is crucial to survival. Challenges and obstacles will be faced every hour,
and those who take action and keep moving forward will survive. If you're stuck and
not taking tasks to completion, you'll find yourself creating bottlenecks. And we know
what happens to a bottleneck when pressure builds up: It eventually explodes.
Everything you do must be taken to completion. This is applicable to your business,
your clients, your relationships and all your challenges.

2. Be scared.

Those who are nervous about failing become hyper-focused and in turn push
themselves to succeed. If you're scared, then you're doing something right. Let that
fear motivate you to keep going. I truly believe that underneath it all, entrepreneurs
are insecure people, but we hide behind our success as entrepreneurs. Use that
insecurity as fuel to take that leap and find confidence in your success. Always keep
your end goal in mind and remind yourself why you're doing this.

YOU MAY ALSO LIKE

I find this practice especially important for entrepreneurs in construction. We face

failure every day, including failure on individual projects and failure in relationships
with suppliers and contractors. It's inevitable in the construction industry. Use fear to
motivate you to get stronger results on the next opportunity.

3. Be resourceful.

As an entrepreneur in the remodeling industry, being resourceful is even more

important than it is for a typical entrepreneur. In our industry, time is money. It's vital,
therefore, that you learn how to use all available resources to increase cash flow. This
quote by LinkedIn co-founder Reid Hoffman, which is one of my favorites, sums up
this concept perfectly: “Starting a company is like throwing yourself off the cliff and
assembling an airplane on the way down."
An excellent example of resourcefulness is our internship program. Since the program
started, we've hired over 20 unpaid interns who have gained significant experience
that has helped them in their careers. Our company benefits from this program
because we're able to provide our prospective clients with time-consuming work, like
3D renders, that we couldn't have provided them with otherwise. Providing these 3D
renders to prospects helps give us an edge over our competitors. It allows us to create
a sense of perceived value and thus makes it look like we've gone above and beyond,
but in the end, it doesn't cost us much.

4. Obsess over cash flow.

When you scale your business to millions of dollars, it will be very important to focus
on your gross margin for each individual project. The success of your projects and
your company will count on it. The most important tool to measure your cash flow is
a works in progress (WIP) report. Ask your bookkeeper to create this for you. A WIP
report is a picture of all your active projects with a focus on how much you've
collected versus how much you've paid and your resulting gross profit margin. It's my
most important tool to measure the health of my company’s cash flow. It's impossible
to manage hundreds of active jobs in multiple cities without a WIP report.

In my early years, I was fooled by having lots of cash in the bank. I thought that was
good enough to measure the success of my company. However, you'll quickly realize
in the remodeling industry that cash disappears quickly. Understand your cash flow,
and do not ignore it.

5. Welcome change.

I truly feel like many experienced people in our industry don't like change. This is not
the right mindset to have. Accepting change can open windows of opportunity for
motivated individuals.

Part of my company's culture has always been to ask, “How do we make things more
efficient and easier for us?” This has created a team of individuals who always put
forth great ideas for change. Always look to improve, even if it means you need to
invest in your company. Don't be shy about changing your business model, your
systems, your employees, yourself and your way of thinking. This is crucial
for growth in the industry, especially as consumer behaviors change.

YEC
CommunityVoice